Having your credit card declined is normal but not the best surprise. If you’ve ever stood in a line to pay at a shop just to have your credit card declined or see someone else’s card be declined – you know how socially awkward and embarrassing it can be.
Your credit card can be declined even if you haven’t exceeded your credit. This could be because the card could be; expired, put on hold due to a significant pending payment, you typed something incorrectly when paying online, the transaction is marked as fraudulent activity or your credit account could have been closed without your knowledge.
Honestly, it can catch you by surprise and give you an unsettling feeling – even when you’re sure that you’ve not exhausted your credit. But as we have seen, it is possible. Things can also get worse if you don’t have an alternative payment method and you need to buy essentials.
Let’s take a look at each of these scenarios in detail, we’ll guide you on what to do in every case, and how you can avoid this from happening.
Credit card expired
An expired credit card is a surefire way for a transaction to get declined. Every credit card has an expiry date indicated on the card and typically, your issuer will alert you before it expires and send you a new card.
For different reasons, you may have missed the alerts and have no idea that it’s expiring. If your address has changed and you never informed your card issuer, there is always a risk that they could send it to your old address!
But don’t worry, nobody can use your new credit card yet. Typically when you receive your new credit card, you need to activate it online and discard the expired one.
Just make sure that you check your card expiry date and update the contact information with your issuer whenever it changes.
You made an incorrect entry
This is common when shopping online. To complete your purchase, online merchants usually require the following information:
- Credit card number;
- Card expiry date;
- Security code number;
- Shipping address; and
- Billing address.
There is a chance you might miss a digit when entering any of that information. Even just one incorrect entry will lead to automatic transaction failure and your card will be declined!
Always double-check everything you’ve entered just to make sure you’ve got your details right before clicking the purchase button.
Your card has been put on hold
A service provider like a hotel or rental car firm may freeze a certain amount of credit on your card when you check-in or pick up a car. This is so that they have the assurance that you can cover any costs should they need you to pay incidentals (dings and scrapes, things like that).
Once your bill is calculated and agreed, the amount put on hold is released and you’re charged the agreed amount. However, before that, your credit card balance may be less than you think due to the amount placed on hold (as it’s not actually reflected in your available credit amount) which may lead to other declined transactions as a result of insufficient credit.
To avoid the embarrassment of a declined credit card transaction, you should try to set aside some alternative payment methods for the period your card has this frozen credit amount.
Suspected fraud
With the increasing credit card fraud rates, issuers have put in place systems to detect any suspicious transactions – this is essential in ensuring customers’ cards are safe. However, by doing this, there is a possibility that you might be locked out when using the card.
Some of the triggers of a suspected fraud include:
- Using the card in different or unusually distant locations, maybe due to traveling;
- The card has been used to make numerous identical transactions, frequently; and/or
- A large purchase that’s outside your normal spending habits.
Credit card firms may, at times, mark a legitimate transaction as potential fraud. They may also choose to freeze your account, meaning you can’t make any other purchases until they’ve confirmed with you that the transaction is legitimate. In such instances, you will receive a security alert to verify you are the one making the purchase.
You can call your credit card issuer to clear the block and gain access to your card. When traveling, it would be better to let your card issuer know as early as possible to reduce the chances of your transactions being declined away from home.
Closed credit account
On limited occasions, your account may end up getting closed without your knowledge. One reason might be if your credit score has lowered noticeably over time. This is a measure credit card companies take to avoid the risk of borrowers not being able to pay them back, although you still have available credit.
Another reason could be that you haven’t used your account for a prolonged period of time. However, in some cases, it could be an error on the credit card issuer’s side. Again, your best bet is to call your credit card provider as they’ll be able to give you the exact reason why the account’s been closed.
What should you do when your credit card is declined?
Although it can be frustrating, your transaction may be rejected just because the bank is overprotective. You may have been trying to buy the next best Apple product and the bank has secured your account as it thinks it’s fraud.
When your credit card is declined and you’re sure you have money, the best thing to do is to respond to the security threat alerts sent by your issuer immediately.
However, there is one great piece of advice that can help avoid being derailed by a declined credit card, which is: ensure that you always have more than one method of payment. I can’t imagine anything worse than trying to pay for petrol with your credit card then needing to phone your Mum to run to the garage as your card got declined :(.
How to avoid credit card transaction failures
Now, I’m not guaranteeing that you’re never going to have your credit card declined but you can do a few things to try to prevent it:
- Register to receive credit card alerts. If you aren’t receiving alerts about suspicious account activity, it’s time you sign up. There are different alerts that you can sign up for, ranging from card expiry to fraudulant alerts. Additionally, there are alert delivery methods like offline messages, emails, and in-app messages;
- Pay off your credit card on time (to maintain or improve your credit score);
- Read your alerts. They could be reminding you of your credit card expiry or notifying you of the delivery of your new card; and
- Update your contact information whenever it changes.
Bottom line
Credit card companies may decline a transaction for a number of different reasons (mainly for security purposes). Such problems can be resolved quickly by responding to security threat alerts sent by the card issuer or by contacting them directly. But, ultimately the best way to overcome a declined credit card transaction is to try to carry more than one method of payment – just so you’re not caught out when the unexpected happens.